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An extended car warranty, sometimes referred to as car repair insurance, or a motor vehicle extended service contract(MVESC), is a policy that protects your vehicle against the cost of repairs in the event of mechanical or electrical failure or breakdown, and any damages not caused by an accident, all of which are not covered by a factory warranty. These coverage policies are frequently pushed on new car buyers by dealerships, and increasingly though automated telemarketing messages and mailings that warn of soon to expire factory warranties. There are certainly circumstances where these value added packages can be beneficial, covering costly repair and offering peace of mind, but there are also instances where they can be a gamble or should be outright avoided . What follows are some guidelines and advice to help determine what’s best for your purchase.
Who Benefits Most from Car Repair Insurance?
There are typically two principal conditions where an extended warranty results in a beneficial investment. These are primarily when one has bought an automobile known to be more likely to breakdown or encounter problems, and/or if a warranty on said troublesome car or truck has or is about to expire. One advantage of extended warranties is that they may in many cases be purchased years and miles down the road. Those who would stand to benefit most from such coverage include Mercedes-Benz, Pontiac, Audi, or Jeeps buyers, whereas Toyota and Lexus buyers generally experience less problems and accordingly would see the least value.
Know Your Coverage Limitations
As automobiles age, general wear and tear starts taking its toll, and based on your make’s reliability and operating conditions (mainly climate) part malfunctions and breakdown occur sooner or later. With car repair insurance it’s necessary to understand which parts are included under a coverage policy and under what instances, so there are no surprises. For instance mechanical breakdown coverage doesn’t include general wear and tear issues, and few extended warranties tend to provide it. Also not covered are routine service items like new tires, oil changes, etc. Every insurance policy will have various part constraints, but at the very least ensure the engine and transmission are covered as these will have the highest repair costs reaching into the thousands.
Finding the Best Deal
Firstly the unsolicited telemarketing messages and mailings that offer extended warranties are quite often ripoffs from illegitimate businesses. They can sometimes look to be from auto manufacturer, but usually are from a completely unrelated 3rd party company.[1] Before buying be sure to consult with the Better Business Bureau(BBB) to get customer ratings and reviews. Truly the most effective way to acquire the best bargain is to investigate your vehicle’s reliability reports for its model and what the expected repairs costs problems that may be expected from it over the years. Then use that amount when you shop and compare with car repair insurance quotes to decide if the cost is justified.
^1. http://ago.mo.gov/ConsumerCorner/encyclopedia/car-extended-warranty.htm